You Were Right About the Conduct. You Still Lost. Here's Why.

You Were Right About the Conduct. You Still Lost. Here's Why.

Most employers who end up in front of the Fair Work Commission on an unfair dismissal claim did not think they were doing anything wrong. In many cases, they were not wrong about the conduct. The employee did what they are alleged to have done. Termination was a reasonable outcome. And yet the Commission still found the dismissal unfair.

This happens because the Fair Work Act does not just ask whether the employee deserved to lose their job. It asks whether the dismissal was harsh, unjust, or unreasonable. Those three words each carry weight, and only one of them needs to apply.

What Each Word Actually Means in Practice

A dismissal can be harsh without being unjust. This typically arises where the conduct is real but the penalty is disproportionate to the circumstances. Long tenure, a clean record, personal circumstances, or the absence of prior warnings can all lead the Commission to find that termination was too severe an outcome, even where the employee was genuinely at fault.

A dismissal can be unjust without the reason being false. This tends to arise where the employee was not given a fair opportunity to respond, where they were not properly informed of the case against them, or where the decision had effectively been made before any meeting took place.

A dismissal can be unreasonable where the employer failed to properly investigate, acted on incomplete information, or applied an inconsistent standard compared to how similar conduct was handled for other employees.

None of these require the employer to have fabricated the reason or acted in bad faith. They can arise from ordinary operational decisions made under time pressure, without proper process behind them.

What This Looks Like in Practice

A warehouse supervisor is caught on camera taking product home without authorisation. It is captured clearly, there is no ambiguity, and the employer has a policy that treats theft as grounds for immediate termination. The decision to terminate feels straightforward.

The problem is what happened next. The employee was called into a meeting the following morning, handed a termination letter, and walked off site. There was no prior discussion about what had been observed. The employee was not told the meeting was disciplinary in nature, was not offered a support person, and was not given any opportunity to explain the circumstances before the decision was made. As it turned out, the employee had spoken to a supervisor two weeks earlier about taking damaged stock home as part of an informal arrangement. Whether that arrangement was authorised or not, the employer never asked.

The Commission found the dismissal was both unjust and unreasonable. The conduct was real. The outcome was still unfair.

Where Employers Consistently Come Unstuck

The most common pattern is not malicious. It is an employer who has a legitimate reason, moves quickly, and does not follow the steps. The meeting happens but the outcome was already decided. The letter is issued the same day. The employee was not told their job was at risk. There was no support person offered. The response was heard but not genuinely considered.

The Commission will look at all of that. A well-founded reason does not immunise a poorly run process, and a thorough process does not save a reason that cannot withstand scrutiny. Both need to hold up.

The Standard to Apply Before Acting

Before proceeding with a termination, the question to ask is not only whether the conduct warrants it. Ask whether the employee knew what was alleged, had a genuine opportunity to respond, and whether that response was taken into account before any decision was made. If the answer to any part of that is uncertain, the process is not finished.

Terminations that are handled properly are rarely overturned. The Commission is not looking for a reason to reinstate every dismissed employee. It is looking at whether the employer acted with basic procedural fairness and a reason that holds up. Meet that standard, and the decision will stand.

Need Help?

Industrial HR advises Australian businesses on managing terminations lawfully and defensibly. If you're considering ending someone's employment and want to understand your risk exposure, get in touch before you act.